Big Iron Pays Big
Annual Salary Survey: IT managers with mainframe and large Unix-based systems skills earn as much as 20 percent more than those in Wintel-based positions.
IT managers with mainframe and large Unix-based systems skills earn as much as 20 percent more than those in Wintel-based positions.
Add a mainframe or large Unix system to your job description, and you can also add as much as 20 percent to your paycheck. And working in financial services or b-to-b commerce can add 10 to 15 percent to your earnings, according to our first annual Enterprise Systems compensation survey of technical professionals at 292 U.S. companies.
Managing mainframe and large Unix systems may be the best route to top-level compensation in information technology in every area except application development. There, Linux developers beat out their peers for top compensation.
But CIOs and other top-level IT managers reported up to 20 percent more in their paychecks if their jobs involved managing large systems, especially AIX, the survey found, than if they primarily supported Windows or small-scale Linux servers. Companies paid mainframe-managing Web administrators about 10 percent more than average, while network administrators with mainframe or big Unix systems responsibilities made 5 to 9 percent more.
While the IT industry may have fallen on hard times over the past year, certain jobs are still in high demand, paying above-average salaries and bonuses. It still pays to manage a Unix- or mainframe-based e-commerce site, for example, and data warehouse, e-commerce site development/management and customer relationship management (CRM) leaders continue to command above-top wages. When IT professionals supported supply chain management software implementations, for instance, companies paid up to 21 percent above-average salaries.
Survey respondents said shops engaged in b-to-b e-commerce systems development pay premium base salaries across a range of positions. CIO salaries, for example, jumped by 25 percent when b-to-b e-commerce systems fell under their purview.
Overall, the Enterprise Systems survey found annual salaries and bonuses for IT executives and managers (including CIOs and VPs) started around $64,000 at the low end and climbed to $150,000 at the high end. Programmers and analysts' salaries ranged between $40,000 and $65,000, depending on experience and responsibilities. Network and database system administrators earned between $45,000 to $75,000 per year, and e-business system managers and directors made up to $100,000.
This is in line with other industry surveys for similar positions. For example, salary data from techies.com, an online technical career center, puts tech management compensation at about $63,000 a year, software developer income at $64,000, and system administrator salaries at $58,000.
Bonuses reported for management jobs ranged between 5 and 18 percent; most management-level positions earned bonuses in the double-digit percentages. Employer industry, not project type, had the most influence on actual bonus levels. Financial services companies were the most generous in 2001, paying their IT managers an average bonus topping 22 percent.
Company size also affected compensation. CIOs at smaller sites (less than 100 IT employees) were paid 11 percent less than the average, while those at larger sites (100 or more IT employees) were paid 37 percent more than the average.
Just over half of the respondents said the faltering economy hadn't affected their company's IT compensation packages. But the remaining 46 percent noted negative impacts on salaries and bonuses paid.
Experts say the economy has been weak since the spring of 2001, and the jury is still out on what impact Sept. 11 will have on hiring and staffing trends. Most companies have curtailed their use of on-site consultants by one-third, according to David Weisman, vice president of global research at Forrester Research, Cambridge, Mass. About 20 percent of companies plan salary reductions, he adds.
Moreover, while 17 percent of companies cut their IT budgets in the spring of 2001, this percentage had grown to 33 percent by October. The Bureau of Labor Statistics is reporting unprecedented IT unemployment levels. In September and October, this rate stood at a record 5 percent, compared with 2.6 percent in late 2000.
But there are a few bright spots. The Information Technology Association of America, based in Washington, D.C., estimates that despite the slumping economy, more than 425,000 IT positions are going unfilled because of a lack of applicants with the requisite technical and non-technical skills and experience. META Group, of Stamford, Conn., puts this shortfall even higher, at 600,000 workers.
And while companies may be offering lower salaries to new hires in some IT positions, many salaries continue to climb, says Nate Viall, president of Nate Viall Associates. His firm, based in Des Moines, Iowa, regularly surveys iSeries (AS/400) salaries and hiring patterns. Viall's own survey found that salaries for IT professionals in these categories were up 8 to 9 percent over last year. "The demand for technology workers at most levels and in nearly all regions remains high," he observes. "This is in spite of layoffs at dotcoms, layoffs in manufacturing and issues with consumer confidence."
Salaries remain at high levels because companies have put stronger compensation plans in place to stem the IT talent drain during the tech boom years, Viall explains. "What the company giveth, the company cannot taketh away," he says. "Business knowledge and skills cannot readily be replaced." The result was substantial "selective increases" for salaries of key talent. "For many, the bonuses of pre-Y2K days are still in place or have been transformed back into higher salaries."
It pays to manage large multi-platform environments. Those CIOs with Unix and AIX sites (55 percent) typically made about $144,900—almost 20 percent above the average reported salary. Likewise, top executives at mainframe sites averaged base salaries of $138,300 a year, or more than 15 percent above the average.
The trend continues down the management ladder. IS directors with Unix and AIX sites had average base salaries of $107,000 or about 8 percent higher than average, making these the most lucrative platforms to manage. Mainframe site managers also commanded above-average base salaries, at about $104,000 a year. And IS managers at mainframe systems sites drew the highest average base salaries, at about $85,000 a year—again 8 percent above the survey average.
A typical top IT executive (CIO, vice president or CTO) commanded an annual average base salary of more than $120,000, along with an annual bonus of up to 18 percent—bringing total average compensation to about $142,000 a year. The CIO base salary jumped to almost $150,000 at companies engaged in b-to-b e-commerce. CIOs overseeing CRM and ERP projects also had substantially fatter paychecks.
Those top executives overseeing large IT shops made considerably more than counterparts at smaller operations. CIOs overseeing 100 or more direct-reporting employees averaged a base salary of $164,500—37 percent above the average. Those with fewer than 100 IT employees averaged $106,300 in base salary or about 11 percent less than the average.
CIOs or VPs in the financial services sector commanded the highest salaries, averaging $166,800 in base compensation per year, followed by CIOs in the overall service sector at $149,400. Regionally, CIOs in the western U.S. fared best, drawing base salaries averaging $147,600. CIOs in the northeastern U.S. followed at $130,000.
Information systems directors, the managers charged with planning, direction and control of day-to-day IS functions, typically averaged $99,100. Bonuses averaged about 15 percent for 2001, bringing their total compensation to an average of $116,000. As with their CIO bosses, those supporting b-to-b e-commerce and CRM implementations fared much better than the survey average in base salaries, averaging about $110,000.
IS directors in the financial services sector again earned top pay, averaging $119,400, while IS directors working for software houses drew $111,400. Regionally, IS directors in the western U.S. fared best with base salaries averaging $120,900.
Again, overseeing large IT operations reflected in the paycheck. IT directors at larger sites (50 or more employees) made an average of $117,100 in base salary, compared with $93,400 for smaller operations.
Moving even further down the organizational ladder, managers of information systems—those who work directly in planning and implementing IT functions—made an average of $78,600. With average bonuses of about 11 percent, this brought average compensation to more than $87,000 a year. Those IS managers at CRM sites made a notch above the average, at $84,400 a year in base salaries.
IS managers in the software development sector commanded the highest salaries, averaging $89,200, followed by IS managers in financial services, who earned $88,800. Regionally, IS directors in the western U.S. fared best, drawing base salaries averaging $93,400. IS managers with larger operations (25 or more employees) made an average base salary of $96,300, or more than 22 percent above the average.
While IS managers are paid more to run mainframes, application development managers—those charged with building corporate software development—made more for developing Linux systems. This suggests a growing emphasis on deploying this open source operating system in upcoming projects. Overall, AD managers made an average of $79,500, with an average annual bonus of almost 12 percent. Thus, total compensation averaged almost $89,000 over the past year. The average base salary jumped to $82,100 for those involved in Linux development projects. As with other management levels, those charged with b-to-b e-commerce sites fared the best, making an average of $83,800 a year. Application development managers in the financial services sector fared best, with average salaries approaching $95,000. Regionally, AD managers in the western U.S. fared best, drawing base salaries averaging $93,400.
Systems and business analysts who work directly with end-user groups to recommend and design appropriate applications made an average of $66,500, along with an average bonus of 8 percent. Salaries for this position were fairly consistent across all functional application areas. Those analysts in the financial services sector fared best, with average salaries approaching $79,000. Regionally, analysts in the western U.S. fared best, drawing base salaries averaging $72,000.
Among programming and analyst groups, the combination of using C/C++ language in conjunction with XML standards is where the money is. Internet/intranet development—the No. 2-ranked specialty—remained a critical function within IT departments. "The popularity of XML-based software has resulted in the need for developers with experience designing Web-based applications," says Katherine Spencer Lee, executive director of RHI Consulting, based in Menlo Park, Calif.
Programmer/analysts, who develop the flow of an application, made an average of $57,700, with average bonuses of 6 percent. XML and C/C++ were the hot buttons here—application developers working on these projects commanded average salaries of $62,000. Financial industry employees once again did the best financially, with average salaries approaching $65,000. Regionally, analysts in the western U.S. fared best, drawing base salaries averaging $64,000.
Programmers, who actually build the applications, averaged $49,200 in base compensation, again with 6 percent bonuses. As with the P/As, C/C++ based development and XML were the two leading areas for these professionals—commanding average salaries of $53,000 and those in the financial services sector earned the top pay of any industry again, with salaries approaching $57,000. Regionally, programmers in the western U.S. fared best, drawing base salaries averaging $55,200.
Experience made a big difference for workers in this field. A programmer with at least five years' experience made up to 20 percent more than an entry-level position.
Breakdowns by State
For the Enterprise Systems salary survey, states were assigned to regions as follows:
Northeast: CT, DC, DE, MA, MD, ME, NH, NJ, NY, PA, RI, VT, WV
South: AL, AR, FL, GA, KY, LA, MS, NC, OK, SC, TN, TX, VA
Midwest: IA, IN, IL, KS, MI, MN, MO, ND, NE, OH, SD, WI
West: AK, AZ, CA, CO, HI, ID, MT, NM, OR, UT, WA, WY
Network administrators—those who monitor, troubleshoot and maintain networks—made an average of $56,000. Bonuses for 2001 ranged about 9 percent, bringing total compensation to about $61,000. Unix networks continued to be a hot area for these professionals—commanding base salaries of almost $59,000, or 5 percent above the norm. As with all prior positions, network administrators in the western U.S. fared best, drawing base salaries averaging $61,400.
RHI's own surveys find there's a continuing demand for good network administrators. "Factors fueling demand for those skilled in designing and managing internal and external networks include an increasingly mobile workforce and an emphasis on safeguarding corporate systems," says RHI's Lee. Companies have the greatest need for network administrators, architects and analysts, according to Lee.
And companies will pay a premium for experience, the Enterprise Systems survey confirmed. A network administrator with at least ten years' experience made up to $65,000.
Another specialty gaining momentum, according to RHI's Lee, is database management. "There is growing demand for individuals accomplished in Oracle and Microsoft SQL Server administration to translate the massive amounts of data collected by e-commerce applications into business intelligence," she says. Database administrators—those charged with the building and usage of company databases—made an average of $66,800. Their value is apparent through double-digit bonuses, which were averaging 11 percent, bringing their total compensation to about $74,000.
Administrators overseeing IMS database systems were drawing top-flight base salaries, averaging $73,000. DB2 and Sybase sites also continued to be a hot area for these professionals—commanding salaries of $71,000. Database administrators in the western U.S. fared best, drawing base salaries averaging $70,300.
E-commerce may have fallen on hard times but it still pays to be in the profession, the survey found. E-commerce directors—charged with coordinating and implementing e-commerce initiatives—made an average of $81,000. Bonuses for these individuals averaged a healthy 15 percent, bringing their total compensation to more than $93,000. E-business managers in the south top the charts, where directors earn up to $88,000 annually in base salary alone. And those with 10 or more years' experience increased pay rates dramatically, to almost $100,000.
Internet managers and directors—responsible for the development and management of company intranets and public Web sites—made an average of $65,200, with an annual bonus of about 10 percent for 2001, boosting average compensation to almost $72,000 for the past year. Here, too, companies were willing to pay top dollar for experience—with a premium of $12,000 base salary above the average for ten years or more. Interestingly, those Web sites hosted on mainframe systems paid the most to Internet managers—about $74,000. Those Internet managers in the southern U.S. again made more than the national average, up to $74,000 annually.
The first annual Enterprise Systems salary survey analyzed data from 292 U.S. companies employing IT managers and other tech professionals; it documents compensation figures for IT managers and professionals. The Web-based survey was conducted in October 2001; respondents were asked to report their own salary levels as well as those of their employees. The questionnaires reflected pay ranges for mainframe, midrange, and other large-system positions nationwide, covering several levels of IT professionals, from CIOs to database specialists.
Respondents to the survey came from the management ranks of a range of organization types and sizes. About 8 percent were CIO or vice president-level executives, while 44 percent were directors or managers. Another 12 percent were system administrators, and 21 percent represented various titles, ranging from project and operations managers to consultants.
On average, upper-level IT executives in the survey managed between 50 and 120 IT employees; IT directors or managers oversaw staffs of about 30 to 50 employees. Two-thirds of the sites surveyed consisted of mainframe or midrange-class systems. Interestingly, only 11 percent of respondents were females.
The survey group drew a larger portion of its base from larger organizations. A total of 42 percent of respondents were with large companies (more than 5,000 employees) and 31 percent with organizations employing 500 to 5,000 employees. Another 26 percent were with smaller organizations with fewer than 500 employees.
The leading blocks of respondents came from manufacturing and public sectors (government, nonprofit and education). About one-fifth of the group, 20 percent, came from the manufacturing sector, and another 20 percent came from public organizations.
Regionally, responses were evenly distributed across the U.S., with 22 percent coming from the Northeast/Mid-Atlantic, 27 percent from the South, 33 percent from across the Midwest, and 18 percent from the western states.